The best case scenario for South Africa’s elections according to S&P

S&P Global Ratings expects South Africa’s ruling party to continue with policy reforms after the 8 May election, and that’s why it has a stable outlook on the nation’s credit rating.

“We think the new administration will continue on the path that they have started,” sovereign analyst Gardner Rusike said Tuesday at a conference in Johannesburg.

“The best-case scenario” is that the African National Congress wins and continues with the reforms that it started, he said. “Reforms will encourage investment.”

S&P cut South Africa’s debt assessment to sub-investment grade in April 2017 after former President Jacob Zuma changed the cabinet and appointed a new finance minister and deputy minister.

After Cyril Ramaphosa replaced Zuma as leader of the ANC and the country, he has taken steps to root out mismanagement at state firms such as power utility Eskom Holdings SOC Ltd. and pledged policy reforms to boost economic growth and lure investment into the country.

S&P has in the past highlighted slow growth and rising government debt as risks to the nation’s credit rating. While the pace of expansion still remains a concern, the company sees the growth rate doubling to 1.6% this year on improved terms of trade, Rusike said.

Investment remains South Africa’s “Achilles’ heel” and if that changes, the economy could expand more than 2% in coming years, he said.

S&P rates South Africa’s foreign-currency debt at BB, two levels below investment grade, and its rand-denominated obligations one step higher.

The central bank’s role in anchoring inflation, the flexible exchange rate and the role of the judiciary help to support the current rating, Rusike said.

Read: What Moody’s thinks about Eskom, the elections and the economy

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The best case scenario for South Africa’s elections according to S&P